As widely anticipated, on Monday, January 28, New Jersey Governor Chris Christie vetoed a bill that would have increased the state’s minimum wage to $8.50 an hour, with future increases tied to the Consumer Price Index (“CPI”). In vetoing the bill, Governor Christie instead proposed a phased-in $1 increase which he feels will better protect the state’s economic recovery post Hurricane Sandy. Specifically, Governor Christie’s proposal would increase the current minimum wage rate by 25 cents this year, by 50 cents in 2014, and by another 25 cents in 2015.

As previously explained in Proposed Legislation in New Jersey Targets Minimum Wage and Wage Withholding, Governor Christie’s veto does not end the debate regarding a minimum wage rate increase in New Jersey. On December 17, 2012, the New Jersey legislature proposed a constitutional amendment which, much like the bill that Governor Christie just vetoed, would raise the minimum wage to $8.25, and would tie future increases to the CPI, thereby averting the need to pass additional legislation to increase the minimum wage in the future. This bill was passed in anticipation of Governor Christie’s veto because a constitutional amendment by the voters can bypass the need for Governor Christie’s approval.

On Thursday, February 7, the New Jersey Senate again approved the resolution. The proposal must next receive a majority approval by the Assembly in order for it to be placed on the November 2013 ballot for voter consideration.

If the New Jersey Constitution is ultimately amended to include a minimum wage rate increase tied to the CPI, this would have significant financial implications for employers in New Jersey. Accordingly, we will continue to monitor the progress of this bill and keep you apprised of any developments.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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